The Market

THE MARKET | Lead Times and Raw Materials

We have now included the information on the Lead Time of each brand in our Portfolio Overview.

While the prices of raw materials continued to increase over last 2 years, the lead time looks to have overcome the challenge.

During the post-Pandemic recovery period businesses have struggled to source raw materials, which in addition costed them an excess of 10 to 60%.

Apart from the Covid impact, there is the raw materials transportation cost impact which can be tracked through Baltic Exchange Dry Index (BDI). The index is reported daily by the Baltic Exchange in London and provides a benchmark for the price of moving the major raw materials by sea and takes into account 23 different shipping routes carrying most of commodities.

The BDI plunged some 84% in the six months before global stock materials bottomed-out because of the pandemic in March 2020. It then soared over 1200% during the recovery phase and peaked in October 2021, and now is at the 2331 level (similar to September 2019).

It is still being difficult to bring together a forecast between the inflation rates, the BDI June low levels, a conflict between Ucraine and Russia as well as the Chinese government measures on Covid.

To complete the picture, one may want to search for activities of the European Raw Material Alliance (ERMA) launched in October 2020. The Alliance aims to facilitate internal activities, in particular developing companies that recycle materials. By boosting the European reindustrialisation there is a hope and a plan of shortening the supply chains of commodities.